Warren Buffett's 2021 Stock Portfolio

Hey guys, welcome back to the channel! In this video, we are going to be talking about what Warren Buffett has been buying and selling in Q4 of 2020 and what his stock portfolio looks like as we lead into 2021. Because yes, I know it's February already in 2021, but we just got the 13F filings publicly released for Q4 of 2020.

13F filings, of course, tell us what these big investors actually hold in their portfolios. They give us a quarterly update as to what they hold, and just in the last couple of days, the 13F filings have come out for Q4 of 2020. So what we're seeing now, the 13s we're looking at now, show us what these investors were holding leading into 2021.

In this video, let's look at what Warren Buffett was buying, what he was selling, and what the largest positions in his portfolio are as he heads through into 2021. Now, the first thing I wanted to talk about are the big new stakes, the new buyers that Warren Buffett has completed in Q4 2020. The first one is a big buy, and it's in Verizon.

So of course, Verizon is the massive U.S. telecommunications company. They offer wireless internet, TV, and phone services. They've got 2,330 retail stores, and they're actually the second largest telecommunications company by revenue behind AT&T. So interesting that Buffett is getting more exposure to the telecommunications sector. As we know, I think from Q3, he bought into T-Mobile, and if we have a look at that position, he actually added 117 percent to that position as well.

So Buffett is seemingly getting into the telecommunications sector, which makes sense. I mean, telecommunications, particularly with what's going on—uh, increased data usage, you know, 5G is just really ramping up at the moment. There's lots of different growth avenues when it comes to telecommunications, especially into the future. You know, we're only using more data. We're only using the internet more and more, while traditional telecommunications, like, you know, home phone and that sort of thing, is kind of dying out.

There's definitely still massive growth in the telecommunications space to be had going into the future, so it doesn't really surprise me that Buffett's getting into this space. At the end of the quarter, at the end of Q4, he owned 147 million shares, and those shares had a market value of $8.62 billion. So he's probably spent $8 to $8.6 billion buying those shares. Interestingly, it went straight to the sixth largest position in his portfolio.

That's pretty unheard of! Usually, it takes a little while for him to buy in over time, but this one is straight to the sixth largest position. Actually, this is the stock I remember a couple of months ago there was a bit of buzz going out about this secret stock that Warren Buffett was buying into because he actually asked the SEC for special treatment so he didn't have to disclose what he was buying.

I think it was last quarter because he was still building a position. As we know, the Warren Buffett effect is very real. Essentially, as soon as it's public information that Warren Buffett is buying something, then the share price spikes. The Verizon's Warren Buffett effect was plus five percent on this news, so a couple of months ago, he asked for special treatment to not have to disclose what he was buying at the time so that he could build that position.

The SEC has worked with him before to ensure Berkshire Hathaway is able to build the position that they want before it becomes public information, and the Buffett effect kicks in. But anyway, I thought that would be interesting. Verizon was the stock that we were all wondering, you know, what is the secret buy Warren Buffett was doing.

So anyway, Verizon was the biggest buy of the quarter. Another new stake that he had was actually in Chevron. Now, obviously, you guys know me—I am in no way, shape, or form an oil expert. In fact, I really don't like oil companies. That totally sits, firstly, outside my values and also sits well outside my circle of competence, so I can't add too much good information here.

But he bought a new stake in Chevron, which is actually the world's eighth largest oil company, so it's a big one for sure. He bought 48.5 million shares, and at the end of Q4 2020, the shares were worth $4.1 billion, so it is a pretty significant stake in his portfolio, and he definitely would have made money on this already. I was looking the other day at the share price of Chevron—it’s already up 12 year-to-date.

So even though I don't necessarily agree with investing in oil from my own personal values, it's definitely an investment that Warren Buffett feels comfortable with, and he's already made some money on it. So those are the two big new buyers from Warren Buffett.

We can have a look at some of the other stuff he did in the quarter. He added to his pharmaceutical bets, so he added 28% to Merck, he added 20% to AbbVie, he added 11% to Bristol Myers. He actually reduced his Apple position by six percent, but to be honest, I don't think this is absolutely anything to worry about.

I mean, Apple, as we know, has had a tremendous run-up. Maybe he was just trimming, who knows? But I mean, it's not like he's trying to get out of Apple, it seems, because, I mean, Apple is 43% of his portfolio. It takes up nearly half of his portfolio, which is just insane really. But there you go.

In terms of companies that he sold out completely of, he sold out of Pfizer, he sold out of JP Morgan, he sold out of Barrick Gold, he sold out of M&T Bank, and also PNC Financial. So interestingly, he only recently bought Pfizer, but you know, in and out. He hasn't held that one for, you know, a couple of decades like a Coca-Cola or something like that.

The other interesting takeaway about what he's selling is that there are a lot of financial companies in the financial sector, and that's definitely a trend. As we'll talk about in just a sec, Buffett is continuing to get out of the financials.

So what I thought we'd do next is actually have a look. So okay, we'll look through his top 10 holdings for 2021. But before I got to that, I wanted to talk about what his top 10 holdings were at the same time last year. So rewind the clock 12 months—what were the 10 biggest positions in Buffett's portfolio and how has that changed over the last year?

What companies has he gotten rid of? What companies has he added? And what are the top 10 largest companies that he's interested in and wanting to hold in 2021? If we start with 2020, we'll go from one to ten. So the largest position was Apple, then Bank of America, then Coke, American Express, Wells Fargo, Kraft Heinz, JP Morgan, U.S. Bancorp, Moody's, and then Delta.

So interestingly, as I was just talking about before, six out of the ten positions there are in the financial sector—in the U.S. financials. So rewind the clock literally just 12 months ago, and Buffett was definitely bullish on the U.S. financials, and he had big positions in a lot of these different financial companies. But this is where things get interesting.

Let's now have a look at his top 10 holdings at the end of Q4 2020. So his top 10 holdings for 2021 again will go from largest position down to smallest position in the top 10. So it starts again; the top four are all the same. So it goes Apple at 44%, Bank of America 11%, Coke at 8%, American Express at 7%.

Then what have we got next? Kraft Heinz, then Verizon, that new buy at 3%, Moody's 3%, U.S. Bancorp 2%, DaVita Healthcare 1.5%, and Chevron at 1.5%. So interestingly, six out of ten twelve months ago—six out of ten of those companies were in the financial sector. Now, only four out of ten are.

As we're looking at trends, he's also continuing to sell out—not just reduce. They're not just dropping to like the 11th largest position or the 15th largest position. He's actually actively selling out of a lot of those financial companies, for instance, selling out of JP Morgan, M&T Bank, PNC Financial. He also continues to reduce heavily in Wells Fargo—it's now only 0.6% of his portfolio.

So I think if we were to zoom out and have a look at the overall 13F—the quarter, the Q4 2020 results from Warren Buffett and what he did—obviously, the big news is, first of all, he adds this big new position in Verizon; he adds a big new position in Chevron, and that's probably what will get most of the buzz—people talking about that.

But I think the other thing that's interesting is that Buffett continues—this is not something that's new—he continues to reduce in the U.S. financials. I mean, really, the only one, or the only two, I guess, he really likes—the only bank that he really, really likes is Bank of America, and then he also has American Express as the fourth largest position in his portfolio.

But overall, guys, that is what Warren Buffett is buying and selling for Q4 of 2020, and they are the top 10 holdings for Warren Buffett as we head into—or this from when this data was released, as we were heading into Q1 2021.

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